Three Factors That Will Shape Online Video In 2013

After sitting on the sidelines for, well, a decade, Time Inc. is betting big on video by launching a digital video unit. Time Inc. isn’t alone, of
course: Conde Nast has hired aggressively in an attempt to find unlocked value in its print assets. It’s worth noting that TV networks have had “a lot of trouble
with web originals.”

Will the print guys actually have an easier time or more success than broadcast giants? Perhaps, because there is less cannibalism and more upside.

But will the print companies’ efforts work? Or is it too little too late?

Bear in mind, times have changed: the same way that some of the early YouTube Networks like Next
New Networks didn’t live up to their full potential -- but follow-up models like Machinima and Maker are doing well -- might provide a glitter of hope for Time, Conde Nast and newer attempts by
old media.

That being said, isn’t Time Warner planning on investing in Maker? If the company goes ahead with those plans, how much of a leash will Time Inc.’s online
video foray really have?

YouTube-funded Channels and VC-backed firms

There have been a lot of startups begun, thanks to a combination of lower financial barriers to
entry and angels and super angels eager to fund the next Instagram. But as widely anticipated as many of those startups have been, they will have a hard time raising follow-up rounds, leading to
consolidation among some as well as sudden deathblows to others.

Could the same thing be said about YouTube channels that were part of the initial $100 million round and failed to get
follow-up money? YouTube decided to re-up only those channels growing their audiences (if you read between the lines, none of them are anywhere close to a positive ROI from a purely financial
perspective – but that’s really not the point to a company like Google that is sitting on a pile of cash and trying to woo Madison Avenue).

In any case, it will be
interesting to see which channels will continue independently, and which ones will shut down.

In the same vein, we always hear about how cheap money and me-too business plans are spreading the
entrepreneurial talent too thin. Could the same be said about online video? Does the fact that “anyone” can produce online video dilute what online video creates?

Mobile and International

Previously, I’ve mentioned that our YouTube channel is generating 25% of its views from mobile devices. That’s twice the 11.7% of
media consumption that the average person consumes on a daily basis on
mobile. Does that make video a form of media with a higher propensity to be consumed online? Or does that mean that YouTube’s higher concentration of global users – where
mobile use is outpacing the U.S.’ – lends it to the form factor?

I don’t know the answer, but with YouTube not yet monetizing on mobile and overall mobile being more hype
than reality, this could actually be a net negative from a purely financial perspective.

If mobile could be a money pit, what then can be said about international? We may be comparing
apples with oranges, but judging from the daily deal fleecing in global markets, one has
to wonder if it’s better to think and act nationally in video. After all, local video is expensive to produce, with a murky ROI, while international distribution isn’t monetizing as
well as the U.S. market.

I’m not condoning a Luddite strategy of typewriters targeting a limited audience in your own backyard, I’m just saying that before pouring oodles of money
in a global and/or mobile strategy, understand that the light at the end of the tunnel may be an oncoming train.